Final answer:
It is true that sometimes not all closing costs and prepaid are covered by the funds the buyer brings to closing, hence adjustments are necessary. Escrow services facilitate the management of these costs, allowing for a single monthly payment covering mortgage, insurance, and taxes.
Step-by-step explanation:
The statement is true. There can be instances where not all closing costs and prepaid are accounted for with the funds that the buyer brings to the closing of a home purchase. Adjustments may need to be made for items that were not previously considered or that changed in value since the initial agreement. This is why the concept of Escrow is important in real estate transactions.
Escrow acts as a neutral third party that holds funds and ensures that both the buyer's and seller's interests are met. It simplifies the process for the buyer by allowing them to make a single monthly payment that includes their mortgage, home insurance, and property taxes. The escrow account is then used to pay these expenses on behalf of the homeowner, ensuring that no payments are missed and that everything is accounted for during the home-buying process.